UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]  Quarterly  report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 For the quarterly period ended June 30, 2000

[_]  Transition report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

                  For the transition period from _____ to _____

                        Commission file number 000-26095


                              ENVIROKARE TECH, INC.
        (Exact name of small business issuer as specified in its charter)

          Nevada                                       88-0412549
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

             2470 Chandler Avenue, Suite 5, Las Vegas, Nevada 89120
                    (Address of principal executive offices)

                                 (702) 262-1999
                           (Issuer's telephone number)

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ]

                                 NOT APPLICABLE

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date: The total number of shares of Common
Stock,  par  value  $.001  per  share,  outstanding  as of July  14,  2000,  was
11,089,478.

Transitional Small Business Disclosure Format (Check one):  Yes [ ]  No [X]


<PAGE>



                              TABLE OF CONTENTS

Part I -- FINANCIAL INFORMATION

Item 1.   Financial Statements...............................................1

                    Accountant's Review Report...............................2

                    Statements of Financial Position.........................3

                    Statements of Operations and Comprehensive Loss..........4

                    Statement of Stockholders' Equity........................5

                    Statements of Cash Flows.................................6


          Notes to Financial Statements......................................7


Item 2.   Plan of Operation.................................................16


Part II -- OTHER INFORMATION

Item 1.    Legal Proceedings.................................................21

Item 2.    Changes in Securities.............................................21

Item 3.    Defaults Upon Senior Securities...................................21

Item 4.    Submission of Matters to a Vote of Security Holders...............21

Item 5     Other Information.................................................22

Item 6.    Exhibits and Reports on Form 8-K..................................22


<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1.    Financial Statements


                              ENVIROKARE TECH, INC.
                              Financial Statements
                       June 30, 2000 and December 31, 1999





                              WILLIAMS & WEBSTER PS
                          Certified Public Accountants
                        Bank of America Financial Center
                           W 601 Riverside, Suite 1940
                                Spokane, WA 99201
                                 (509) 838-5111



                                       1
<PAGE>


Board of Directors
Envirokare Tech, Inc.
2470 Chandler, Suite 5
Las Vegas, Nevada  89120

Accountant's Review Report

We have reviewed the accompanying  statement of financial position of Envirokare
Tech,  Inc. (a  development  stage  company) as of June 30, 2000 and the related
statements of operations and  comprehensive  loss, cash flows, and stockholders'
equity for the six months ended June 30, 2000,  and for the period from June 15,
1998  (inception)  through June 30, 2000.  These  financial  statements  are the
responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters.  It is  substantially  less in scope than an audit in  accordance  with
generally accepted auditing standards,  the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.  Accordingly,
we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  financial  statements  in order  for them to be in
conformity with generally accepted accounting principles.

The financial statements for the year ended December 31, 1999 were audited by us
and we  expressed an  unqualified  opinion on them in our report dated March 31,
2000, but we have not performed any auditing procedures since that date.

As discussed in Note 2, the Company has been in the development  stage since its
inception and has no revenues.  The Company's  continued  viability is dependent
upon the Company's  ability to meet its future  financing  requirements  and the
success of future  operations.  These factors raise  substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans regarding
those matters are  described in Note 2. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.



Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
August 1, 2000


                                       2
<PAGE>

                       ENVIROKARE TECH, INC.
                   (A Development Stage Company)
                  STATEMENT OF FINANCIAL POSITION

<TABLE>
<CAPTION>
                                                                     June 30,     December 31,
                                                                       2000           1999
                                                                   (unaudited)
                                                                   -----------    -----------
<S>                                                                 <C>            <C>
ASSETS
  CURRENT ASSETS
         Cash                                                       $    64,687    $   148,046
         Prepaid expenses                                                21,745         76,291
                                                                    -----------    -----------
                TOTAL CURRENT ASSETS                                     86,432        224,337
                                                                    -----------    -----------
  PROPERTY AND EQUIPMENT
         Furniture and fixtures                                           1,893          1,593
         Office equipment                                                 6,661          6,661
         Molds                                                           70,000           --
                Less accumulated depreciation                            (2,183)        (1,385)
                                                                    -----------    -----------
                TOTAL PROPERTY AND EQUIPMENT                             76,371          6,869
                                                                    -----------    -----------
  OTHER ASSETS
         Deposits and retainers                                          97,441         18,789
         Patent costs                                                    37,598         33,939
                                                                    -----------    -----------
                TOTAL OTHER ASSETS                                      135,039         52,728
                                                                    -----------    -----------
         TOTAL ASSETS                                               $   297,842    $   283,934
                                                                    ===========    ===========

LIABILITIES & STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
         Accounts payable                                           $        25    $    88,155
         Notes payable                                                   61,965         61,965
         Accrued interest                                                 9,866          6,770
         Reimbursement due                                                 --           12,200
                                                                    -----------    -----------
                TOTAL CURRENT LIABILITIES                                71,856        169,090
                                                                    -----------    -----------
  COMMITMENTS AND CONTINGENCIES                                            --             --
                                                                    -----------    -----------
  STOCKHOLDERS' EQUITY
         Preferred stock, 10,000,000 shares authorized,
                $.001 par value; 500,000 shares issued and
                outstanding                                                 500            500
         Common stock, 200,000,000 shares authorized,
                $.001 par value; 11,089,478 and 10,746,140 shares
                issued and outstanding, respectively                     11,089         10,746
         Stock subscriptions receivable                                    --         (105,000)
         Additional paid-in-capital                                     842,557        585,400
         Stock options                                                  552,000        552,000
         Accumulated deficit during development stage                (1,176,860)      (927,600)
         Other comprehensive loss                                        (3,300)        (1,202)
                                                                    -----------    -----------
         TOTAL STOCKHOLDERS' EQUITY                                     225,986        114,844
                                                                    -----------    -----------
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $   297,842    $   283,934
                                                                    ===========    ===========
</TABLE>


           See accountant's review and notes to financial statements.
                                       3
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
                                                         For the         For the         For the        For the        Period from
                                                       Three Months    Three Months     Six Months     Six Months     June 15, 1998
                                                          Ended           Ended           Ended          Ended        (Inception) to
                                                         June 30,        June 30,        June 30,       June 30,         June 30,
                                                           2000            1999            2000           1999             2000
                                                       (unaudited)     (unaudited)     (unaudited)     (unaudited)     (unaudited)
                                                       ------------    ------------    ------------    ------------    ------------
<S>                                                    <C>             <C>             <C>             <C>             <C>
REVENUES                                               $       --      $       --      $       --      $       --      $       --
                                                       ------------    ------------    ------------    ------------    ------------
EXPENSES
  Consulting fees - related parties                           8,817          15,000          23,987          30,000         316,703
  Other consulting fees                                      16,615           3,000          49,115          10,500         434,165
  Rent                                                        2,292           3,684           4,584           5,874          18,403
  General and administrative                                 41,518          16,708          66,404          30,360         177,110
  Depreciation                                                  394             326             798             326           2,182
  Professional fees                                          44,013          18,621          54,699          18,784         100,662
  Research and development                                    7,009         (11,500)          7,009            --            78,159
  Wages, salaries, and payroll taxes                         39,569            --            39,569            --            39,569
                                                       ------------    ------------    ------------    ------------    ------------
         TOTAL EXPENSES                                     160,227          45,839         246,165          95,844       1,166,953
                                                       ------------    ------------    ------------    ------------    ------------
LOSS FROM OPERATIONS                                       (160,227)        (45,839)       (246,165)        (95,844)     (1,166,953)

OTHER EXPENSES
  Interest on notes payable                                   1,544             175           3,095           1,864           9,907
                                                       ------------    ------------    ------------    ------------    ------------
         TOTAL OTHER EXPENSES                                 1,544             175           3,095           1,864           9,907

INCOME TAX                                                     --              --              --              --
                                                       ------------    ------------    ------------    ------------    ------------
NET LOSS                                                   (161,771)        (46,014)       (249,260)        (97,708)     (1,176,860)

OTHER COMPREHENSIVE LOSS
  Foreign currency translation loss                            (940)           --            (2,098)           --            (3,300)
                                                       ------------    ------------    ------------    ------------    ------------
COMPREHENSIVE LOSS                                     $   (162,711)   $    (46,014)   $   (251,358)   $    (97,708)   $ (1,180,160)
                                                       ============    ============    ============    ============    ============

  BASIC AND DILUTED NET LOSS PER COMMON SHARE          $      (0.01)   $      (0.00)   $      (0.02)   $      (0.01)   $      (0.11)
                                                       ============    ============    ============    ============    ============

  WEIGHTED AVERAGE NUMBER OF BASIC AND DILUTED
         COMMON STOCK SHARES OUTSTANDING                 11,089,478      10,089,296      10,917,809      10,089,296      10,476,823
                                                       ============    ============    ============    ============    ============
</TABLE>


           See accountant's review and notes to financial statements.
                                       4
<PAGE>


                           ENVIROKARE TECH, INC.
                       (A Development Stage Company)
                     STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                                                      Preferred Stock              Common Stock           Additional
                                                                   Number                      Number                       Paid-In
                                                                  of Shares       Amount      of Shares       Amount        Capital
                                                                  ----------    ----------    ----------    ----------    ----------
<S>                                                                  <C>        <C>           <C>           <C>           <C>
Issuance of common stock in June, 1998
   for cash at $.001 per share                                          --      $     --      10,000,000    $   10,000    $     --

Net loss for period ended December 31, 1998                             --            --            --            --            --
                                                                  ----------    ----------    ----------    ----------    ----------
Balance
   December 31, 1998                                                    --            --      10,000,000        10,000          --

Issuance of common stock at $.50 - $1.00 per share                      --            --         746,140           746       334,053
   for cash

Issuance of  preferred stock at $.50 per share                       500,000           500          --            --         249,500
   for cash

Issuance of stock options                                               --            --            --            --            --

Forgiveness of debt                                                     --            --            --            --           1,847

Net loss for year ended December 31, 1999                               --            --            --            --            --

Foreign currency translation loss                                       --            --            --            --            --
                                                                  ----------    ----------    ----------    ----------    ----------
Balance, December 31, 1999                                           500,000           500    10,746,140        10,746       585,400

Cash received for subscriptions receivable                              --            --            --            --            --

Issuance of common stock at $0.75 per share                             --            --         343,338           343       257,157

Net loss for the six months ended June 30, 2000                         --            --            --            --            --

Foreign currency translation loss                                       --            --            --            --            --
                                                                  ----------    ----------    ----------    ----------    ----------
Balance, June 30, 2000 (unaudited)                                   500,000    $      500    11,089,478    $   11,089    $  842,557
                                                                  ==========    ==========    ==========    ==========    ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                                          Accumulated
                                                                                            Deficit
                                                                                            During          Other         Total
                                                                Stock     Subscriptions   Development   Comprehensive  Stockholders'
                                                               Options      Receivable       Stage          Loss          Equity
                                                             -----------   -----------    -----------   -------------  ------------
<S>                                                          <C>           <C>            <C>            <C>            <C>
Issuance of common stock in June, 1998
   for cash at $.001 per share                               $      --     $      --      $      --      $      --      $    10,000

Net loss for period ended December 31, 1998                         --            --          (34,427)          --          (34,427)
                                                             -----------   -----------    -----------    -----------    -----------
Balance
   December 31, 1998                                                --            --          (34,427)          --          (24,427)

Issuance of common stock at $.50 - $1.00 per share                  --        (105,000)          --             --          229,799
   for cash

Issuance of  preferred stock at $.50 per share                      --            --             --             --          250,000
   for cash

Issuance of stock options                                        552,000          --             --             --          552,000

Forgiveness of debt                                                 --            --             --             --            1,847

Net loss for year ended December 31, 1999                           --            --         (893,173)          --         (893,173)

Foreign currency translation loss                                   --            --             --           (1,202)        (1,202)
                                                             -----------   -----------    -----------    -----------    -----------
Balance, December 31, 1999                                       552,000      (105,000)      (927,600)        (1,202)       114,844

Cash received for subscriptions receivable                          --         105,000           --             --          105,000

Issuance of common stock at $0.75 per share                         --            --             --             --          257,500

Net loss for the six months ended June 30, 2000                     --            --         (249,260)          --         (249,260)

Foreign currency translation loss                                   --            --             --           (2,098)        (2,098)
                                                             -----------   -----------    -----------    -----------    -----------
Balance, June 30, 2000 (unaudited)                           $   552,000   $      --      $(1,176,860)   $    (3,300)   $   225,986
                                                             ===========   ===========    ===========    ===========    ===========
</TABLE>


           See accountant's review and notes to financial statements.
                                       5
<PAGE>

                           ENVIROKARE TECH, INC.
                       (A Development Stage Company)
                          STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                    For the        For the      Period from
                                                                   Six Months     Six Months   June 15, 1998
                                                                     Ended          Ended      (Inception) to
                                                                    June 30,       June 30,       June 30,
                                                                      2000           1999           2000
                                                                   (unaudited)    (unaudited)    (unaudited)
                                                                   -----------    -----------    -----------
<S>                                                                <C>            <C>            <C>
Cash flows from operating activities:
        Net loss                                                   $  (249,260)   $   (97,708)   $(1,176,860)
        Adjustments to reconcile net loss
               to net cash used by operating activities:
        Depreciation  and amortization                                     798            326          2,182
        Stock options issued for consulting fees                          --             --          552,000
        Increase (decrease)  in prepaid expenses and deposits          (24,106)        (2,657)      (119,186)
        Increase (decrease) in accounts payable                       (100,330)         1,549             26
        Increase in accrued interest                                     3,096           --            9,866
        Increase in accrued expenses                                      --            3,480           --
        Increase in accrued expenses to related party                     --           21,000           --
        Expenses paid by note payable                                     --             --            2,870
                                                                   -----------    -----------    -----------
        Net cash used by operating activities                         (369,802)       (74,010)      (729,102)
                                                                   -----------    -----------    -----------
Cash flows from investing activities:
        Purchase of molds                                              (70,000)          --          (70,000)
        Patent costs                                                    (3,659)          --           (4,268)
        Purchase of equipment                                             (300)        (3,843)        (5,942)
                                                                   -----------    -----------    -----------
        Net cash used in investing activities                          (73,959)        (3,843)       (80,210)
                                                                   -----------    -----------    -----------
Cash flows from financing activities:
        Proceeds from sale of preferred stock                             --             --          250,000
        Proceeds from sale of common stock                             362,500         65,800        602,299
        Proceeds from issuance of notes payable to related party          --           12,500           --
        Proceeds from issuance of notes payable                           --            2,000         25,000
                                                                   -----------    -----------    -----------
        Net cash provided by financing activities                      362,500         80,300        877,299
                                                                   -----------    -----------    -----------
Increase (decrease) in cash                                            (81,261)         2,447         67,987

Adjustment for foreign currency                                         (2,098)          --           (3,300)

Cash, beginning of period                                              148,046          2,388           --
                                                                   -----------    -----------    -----------
Cash, end of period                                                $    64,687    $     4,835    $    64,687
                                                                   ===========    ===========    ===========
SUPPLEMENTAL INFORMATION:

        Interest paid                                              $      --      $      --      $      --
                                                                   ===========    ===========    ===========
        Income taxes paid                                          $      --      $      --      $      --
                                                                   ===========    ===========    ===========
NON-CASH TRANSACTIONS:
        Note issued for purchase of property, equipment
                and operating expenses                             $      --      $     3,635    $     3,635
        Note issued for pending patent to related party            $      --      $    33,330    $    33,330
        Reimbursement due for purchase of equipment                $      --      $     1,847    $     1,847
        Stock options issued for consulting fees                   $      --      $      --      $   552,000
        Stockholder's contribution for equipment                   $      --      $      --      $     1,847
</TABLE>


           See accountant's review and notes to financial statements.
                                       6
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Envirokare Tech,  Inc.,  (hereinafter  "the Company"),  was incorporated in June
1998  under the laws of the State of  Nevada.  In  December  1998,  the  Company
acquired the property,  assets and undertakings of a business  manufacturing and
developing a rubber mold technology and patent rights potentially  applicable to
future  development  of a pallet  made of  recycled  materials.  The  Company is
currently  developing  marketing and manufacturing  plans for the products under
development.  The Company maintains an office in Las Vegas,  Nevada. The Company
has elected a fiscal year-end of December 31.

The  Company  is in the  development  stage,  and as of June  30,  2000  had not
realized any significant revenues from its planned operations.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of  significant  accounting  policies of Envirokare  Tech,  Inc. is
presented to assist in understanding  the Company's  financial  statements.  The
financial  statements and notes are representations of the Company's  management
which is  responsible  for their  integrity and  objectivity.  These  accounting
policies  conform to  generally  accepted  accounting  principles  and have been
consistently applied in the preparation of the financial statements.

Development Stage Activities
The Company has been in the development  stage since its formation in June 1998.
It is primarily  engaged in the refinement of a  manufacturing  process which is
based on  research  findings  for the  development  of pallets  made of recycled
materials.

Going Concern
The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.

As shown in the accompanying  financial statements,  the Company has incurred an
accumulated  deficit of $1,176,860 which includes a net loss of $249,260 for the
six months ended June 30, 2000 and has a working capital  deficit.  The Company,
being a development stage enterprise,  is currently putting  technology in place
which will, if successful,  mitigate these factors which raise substantial doubt
about the Company's ability to continue as a going concern.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and  classification  of  recorded  assets,  or the  amounts  and
classification  of liabilities  that might be necessary in the event the Company
cannot continue in existence.


                                       7
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Going Concern (Continued)
The Company has raised equity  capital  through the sale of common and preferred
stock.  Management  has  proceeded  as planned in the ongoing  development  of a
recycled plastic and rubber composite  pallet.  In-depth  analysis of compounds,
extrusion method and equipment  modifications have been studied and refined,  as
have initial  prototypes.  During the year ended  December 31, 1999, the Company
contracted  with   Thermoplastic   Composite   Designs  Inc.  and  Thermoplastic
Flowforming Technologies Corp. for professional and technical services. Finished
product is expected to be available for distribution to potential  customers for
in-use evaluation during the third quarter of year 2000.

Concentration of Risk
The  Company  maintains  its  three  cash  accounts  in two  separate  financial
institutions.  Two accounts  are located at one  commercial  bank in  Vancouver,
British  Columbia,  Canada.,  one  of  which  is  a  business  checking  account
maintained in U.S.  dollars.  This account totaled $9,281,  as of June 30, 2000.
This account is not insured.

Accounting Method
The Company's  financial  statements  are prepared  using the accrual  method of
accounting.

Fair Value of Financial Instruments
The  carrying  amounts for cash,  marketable  securities,  accounts  receivable,
accounts payable,  notes payable and accrued liabilities  approximate their fair
value.

Loss Per share
Loss per share was  computed by dividing  the net loss by the  weighted  average
number of shares  outstanding  during the period. The weighted average number of
shares was calculated by taking the number of shares  outstanding  and weighting
them by the amount of time that they were outstanding.  Basic and diluted shares
outstanding are the same, as the inclusion of common stock  equivalents would be
anti-dilutive.  As of June 30, 2000, the Company had convertible preferred stock
and stock options equivalent to 12,300,000 common shares which is decerned to be
anti-dilutive.

Cash and Cash Equivalents
For  purposes  of the  Statement  of  Cash  Flows,  the  Company  considers  all
short-term debt securities  purchased with a maturity of three months or less to
be cash equivalents.

Provision for Taxes
At June 30,  2000  and  December  31,  1999,  the  Company  had net  accumulated
operating  losses of  approximately  $1,175,000 and $925,000,  respectively.  No
provision  for  taxes  or  tax  benefit  has  been  reported  in  the  financial
statements,  as there is not a measurable  means of assessing  future profits or
losses.


                                       8
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassification
The  reclassification  of expenses in the financial  statements  has resulted in
certain  changes  in  presentation  which  have no effect  on the net  losses or
shareholders'  equity for June 30, 2000 and December  31,  1999,  or the periods
then ended.

Use of Estimates
The process of preparing  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires the use of estimates and  assumptions
regarding certain types of assets,  liabilities,  revenues,  and expenses.  Such
estimates  primarily relate to unsettled  transactions and events as of the date
of the financial statements.  Accordingly,  upon settlement,  actual results may
differ from estimated amounts.

Impaired Asset Policy
In March 1995,  the  Financial  Accounting  Standards  Board  issued a statement
titled "Accounting for Impairment of Long-lived  Assets." In complying with this
standard,  the Company will review its long-lived  assets quarterly to determine
if any events or changes in  circumstances  have transpired  which indicate that
the carrying  value of its assets may not be  recoverable.  The Company does not
believe any  adjustments  are needed to the carrying value of its assets at June
30, 2000.

The Company does not believe any adjustments are needed to the carrying value of
its assets at June 30, 2000, nor at December 31, 1999.

Year 2000 Issues
Like other companies,  Envirokare Tech, Inc. could be adversely  affected if the
computer  systems the Company,  its  suppliers or customers  use do not properly
process  and  calculate  date-related  information  and  data  from  the  period
surrounding  and including  January 1, 2000. This is commonly known as the "Year
2000"  issue.  Additionally,  this issue could impact  non-computer  systems and
devices such as  production  equipment  and  elevators,  etc. At this time,  the
Company  does not have any  evidence of problems  associated  with the Year 2000
issue.

Interim Financial Statements
The interim  financial  statements  as of and for the six months  ended June 30,
2000 and 1999 included herein have been prepared for the Company, without audit.
They reflect all adjustments which are, in the opinion of management,  necessary
to  present  fairly  the  results  of  operations  for these  periods.  All such
adjustments are normal recurring adjustments.  The results of operations for the
periods  presented are not necessarily  indicative of the results to be expected
for the full fiscal year.


                                       9
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Compensated Absences
Employees  of the Company  are  entitled  to paid  vacation,  paid sick days and
personal days off depending on job classification,  length of service, and other
factors.  The Company's  initial  payroll was in May 2000. The Company's  policy
will be to recognize  the cost of  compensated  absences  when  actually paid to
employees.  If  the  amount  could  be  estimated,  currently  it  would  not be
recognized, as the amount would be deemed immaterial at this time.

Translation of Foreign Currency
Monetary assets and liabilities denominated in foreign currencies are translated
into United  States  dollars at rates of exchange in effect at the balance sheet
date.  Gains or losses  are  included  in income for the year,  except  gains or
losses  relating to long-term  debt which are deferred  and  amortized  over the
remaining  term of the  debt.  Non-monetary  assets  and  liabilities  and items
recorded in income arising from transactions  denominated in foreign  currencies
are translated at rates of exchange in effect at the date of the transaction.

Derivative Instruments
In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities." This new standard  establishes  accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity  recognize all derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at fair value.

At June 30, 2000, the Company has not engaged in any transactions  that would be
considered derivative instruments or hedging activities.

Research and Development Costs
Costs of research and development are expensed as incurred.


NOTE 3 - INTANGIBLE ASSETS

In December 1998, the Company acquired technology rights from Mr. Real Morel and
his affiliated  companies of  International  Pallet Control Systems Inc. and The
Pallet  Company.  The Company is currently  investigating  the patent process on
this  technology.  During the six months ended June 30, 2000,  attorney  fees of
$3,659,  and for the year ended  December 31, 1999 attorney  fees of $609,  were
added to patent cost. The amortization of patent costs will begin when the final
patents are  granted.  If the Company  does not obtain the patent,  the costs of
acquiring the patent rights from its originator will be charged to operations.


                                       10
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000


NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Depreciation  is provided  using the
straight line method over the estimated  useful lives of the assets.  The useful
lives of property,  plant and equipment  for purposes of computing  depreciation
are five and seven years. The following is a summary of property,  equipment and
accumulated depreciation.


                                            June 30,     December 31,
                                              2000           1999
                                          ------------   ------------
          Furniture and Fixtures          $      1,893   $      1,593
          Less Accumulated Depreciation            418            269
                                          ------------   ------------
          Net Furniture & Fixtures        $      1,475   $      1,324
                                          ============   ============

          Office Equipment                $      6,661   $      6,661
          Less Accumulated Depreciation          1,765          1,116
                                          ------------   ------------
          Net Office Equipment            $      4,896   $      5,545
                                          ============   ============

          Molds                           $     70,000   $       --
                                          ============   ============

The Company,  in the  development of its pallet  products,  has acquired  molds,
which will be depreciated  over their expected  useful life which  currently has
not been determined.  The molds are currently  carried at their deemed cost. See
Note 10.


NOTE 5 - DETAILS OF SHORT-TERM DEBT

Reimbursement due, in the amount of $1,847, was money owing Mr. Timothy Zuch for
gift  certificates  provided to the Company in fiscal year ending  December  31,
1998,  which were deducted from the purchase price of computer  equipment.  This
debt was  forgiven  during the year  ending  December  31,  1999 and  applied to
additional paid-in capital.

Refunds of $12,200 were due at December 31, 1999 to potential investors from the
stock subscription offering. The potential investors did not meet the accredited
investor  criteria that was a  prerequisite  for inclusion in the offering.  The
refunds were paid in February 2000.

Short-term  notes  payable at June 30, 2000 and  December  31,  1999  consist of
unsecured  notes bearing 10% interest and are dated between  August 18, 1998 and
December 16, 1998.  The  short-term  notes are payable to Mr. Real Morel and are
due on demand.  The principal  amount on the notes is $63,965.  Interest expense
recorded  on the notes  payable at June 30, 2000 and 1999 was $3,095 and $1,864,
respectively.


                                       11
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000


NOTE 5 - DETAILS OF SHORT-TERM DEBT (CONTINUED)

In May 2000, Mr. Real Morel filed suit for payment of these notes in the Supreme
Court of British Columbia,  Canada. Mr. Morel alleges non-payment by the company
of amounts due  pursuant to demand  promissory  notes made by the Company to Mr.
Morel during 1998, after  consultation with British Columbia legal counsel and a
review of the  circumstances  surrounding the issuance of the notes, the Company
has resolved to dispute  liability.  Management of the Company believes that the
outcome will not have a material adverse effect on the financial position of the
Company.


NOTE 6 - COMMON STOCK

Upon  incorporation  on June 15,  1998,  10,000,000  shares of common stock were
issued at $.001 per share,  under  Regulation D, Rule 504. At December 31, 1998,
this common  stock was held by 30  shareholders,  none of whom held in excess of
ten percent of the total.

On February 22, 1999, the Board of Directors  authorized a 2-for-1 reverse stock
split of the Company's $.001 par value common stock. This reverse stock split is
not reflected in the statement of stockholders'  equity because of the effect of
the March 1, 2000 forward stock split described below.

During the year ending  December 31,  1999,  common stock shares of 373,070 were
issued for cash.  At December  31, 1999 the balance of stock  subscriptions  was
$105,000. Stock subscriptions were paid, and stock issued February 16, 2000, for
these common stock shares.

During the month of February 2000, common stock shares of 343,338 were issued at
$0.75 per share.  A common stock split,  two for one,  took place for holders of
record  as of  March 1,  2000.  All  references  in the  accompanying  financial
statements  to the  number of common  shares and per share  amounts  for the six
months ended June 30, 2000 and year ended  December 31, 1999 have been  restated
to reflect the stock split.


NOTE 7 - PREFERRED STOCK

During the year ended December 31, 1999,  preferred stock shares of 500,000 were
issued for $250,000 cash. The preferred  stock has no rights for dividends,  but
is  convertible  to common  stock at the rate of ten  shares of common  for each
preferred share. This conversion feature was modified to twenty shares to one by
the stock split effective March 1, 2000.


                                       12
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000


NOTE 8 - STOCK OPTIONS

In  September  1999,  the  Company  adopted  the 1999 Stock  Plan.  The plan was
registered  with the  Securities  and Exchange  Commission.  The 1999 Stock Plan
authorizes  2,000,000 stock options.  The purposes of the 1999 Stock Plan are to
attract,  retain  and  motivate  employees,  directors  and  consultants  of the
Company. In accordance with Statement on Financial  Accounting Standard No. 123,
the fair value of the options  granted  was  estimated  using the  Black-Scholes
Option Price Calculation. The following assumptions were made to value the stock
options:  risk-free interest rate at 5%, expected life at 10 years, and expected
volatility at 30%. For the year ended  December 31, 1999,  the Company  recorded
$552,000  ($ .48 per  option) in  consulting  fees for the value of the  options
based upon these Black  Scholes  assumptions.  These stock  options  will expire
September 29, 2009. (See Note 9). The plan also requires early exercising of the
options for various reasons,  including employment termination,  separation from
services, or cancellation of consulting contracts.

Effective in September  1999,  the Company prior to the March 2000 forward stock
split, had granted  1,150,000 options for the same amount of common stock of the
Company.  The  subsequent  stock  split was  extended  by action of the board of
directors to include the options,  which  increased the  outstanding  options to
2,300,000. The underlying shares allowed by the plan was limited to 2,000,000 at
that time. Thereby,  the Board of Directors had informally approved the doubling
of the authorized  shares under the plan in conjunction with the 2 for 1 forward
stock split.

This issue was discovered  after the Annual General Meeting of the  stockholders
on May 13, 2000.  Management and the board are currently amending and correcting
the plan and documents to address this issue. The formal  directors'  consent on
the 2 for 1 stock dividend  conducted in March 2000 was not  memorialized  until
June 27, 2000. Until amended or some subsequent  event, the outstanding  options
are over  authorized  based  upon  the  plan's  current  limits.  The  Company's
management  believes that the appropriate  plan amendments and director  actions
will be completed during August 2000.

                                                       Fixed Plan
                                                -------------------------
                                                               Weighted
                                                 Number of      Average
                                                  Shares       Exercise
                                                                 Price
                                                -----------   -----------
             Outstanding at December 31, 1998            --   $        --
             Granted                              2,300,000          .575
                                                -----------   -----------
             Outstanding at December 31, 1999     2,300,000          .575
             Granted                                     --            --
                                                -----------   -----------
             Outstanding at June 30, 2000         2,300,000   $      .575
                                                ===========   ===========

             Options Exercisable June 30, 2000    2,300,000   $      .575
                                                ===========   ===========


                                       13
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000

NOTE 8 - STOCK OPTIONS (CONTINUED)

Common stock when issued for the above  options  will have  certain  contractual
restrictions  upon  subsequent  sale.  All holders  cannot sell more than 25% of
their  granted  amounts per year held,  nor exceed  total  annual stock sales of
$100,000 per year for shares that qualify as exercisable as first time under the
plan.

Subsequent  to June 30, 2000, on July 31, 2000,  300,000 of the granted  options
expired  unexercised.  Therefore,  as of August 1, 2000,  2,000,000 options were
outstanding.


NOTE 9 - RELATED PARTIES

Jeannie M. Runnalls, who was appointed president, secretary, and director of the
Company on January 24, 2000, received $23,987 in cash for consulting fees during
the first six months of 2000.  Jeannie M. Runnalls,  received cash in consulting
fees during the year ended December 31, 1999 of $22,715.

Stock  options of 2,300,000  were issued for common stock shares during the year
ending  December  31, 1999.  Of these stock  options,  1,000,000  were issued to
related parties. (See Note 8).

Madelyn  Thomas,  who received  $10,000 in consulting fees under the terms of an
ongoing  contract  as of  December  31,  1998 and an  additional  $20,000  as of
December 31, 1999, was the wife of the past president of the Company, Charles W.
Thomas. On June 1, 1999,  Madelyn Thomas served the Company thirty-day notice to
terminate her consulting contract to be effective at month's end.


NOTE 10 - COMMITMENTS AND CONTINGENCIES

The Company  entered into  consulting  contracts with Susan Westfall and Madelyn
Thomas on November 1, 1998 for the purpose of establishing  corporate offices on
behalf of the Company.

The terms of Ms. Westfall's contract specified that she would receive $2,500 per
month  for the  term of the  contract,  which  commenced  November  1,  1998 and
terminated April 30, 1999. The terms of Mrs.  Thomas's  contract  specified that
she would receive $5,000 per month for the term of the contract, which commenced
November  1,  1998  and  terminated  June  30,  1999.  Both  contracts  provided
indemnification  against any and all liability and provided for reimbursement of
expenses up to a specified amount.

On April 1, 1999,  the Company  entered into a lease for office space in British
Columbia  for the  period of twelve  months  beginning  April 1,  1999.  Monthly
payments for the initial year of the


                                       14
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000

NOTE 10 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

lease  were $800  (CDN) per  month,  not  including  utilities.  This  lease was
cancelled as of July 31, 1999 without penalty.

The Company  entered  into a lease for office  space in Nevada for the period of
thirty-six  months beginning  October 1, 1998.  Monthly payments for the initial
year  of the  lease  were  $730  per  month,  including  $40 for  utilities.  In
compliance with the terms of the lease, the Company has purchased  comprehensive
public liability insurance. Future annual minimum lease payments for the term of
the lease are as follows for the years ending December 31:

                         2000                      $4,380
                         2001                      $6,570

In  November  1999,  the  Company  entered  into a contract  with  Thermoplastic
Composite Designs (TCD), Inc. and Thermoplastic  Flowforming  Technologies Corp.
(TPF) for  professional  and technical  services.  These  services  included the
design and material specs, mold fabrication, prototype and demo units. The total
contract amount is $133,800. During the year ended December 31, 1999, the amount
paid was $50,800  leaving a balance  owing of $83,000.  During the period  ended
June 30, 2000,  this  balance was paid.  The Company  recorded  $70,000 of these
research and development costs to prepaid expenses as of December 31, 1999. This
amount  represents the value of the molds derived from this contract,  which may
become depreciable  property if no further development is necessary.  As of June
30,  2000,  this  prepaid  expense of $70,000 was  reclassified  as property and
equipment.  Upon execution of a TPF Technology Licensing Agreement,  the Company
will receive a credit of $61,600;  (representing 46% of the payments made to TCD
under  the  development  contract),  toward  the  license  fee  payable  to  TPF
Technologies.


                                       15
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                                  June 30, 2000


Item 2. Plan of Operation

     This Form 10-QSB  contains some  statements  that the Company  believes are
"forward-looking  statements."  These include statements about the future of the
pallet industry, statements about future business plans and strategies, and most
other statements that are not historical in nature.  Forward-looking  statements
involve  risks and  uncertainties,  including  changing  market  conditions  and
competitive,  regulatory and other matters discussed in the disclosure contained
in this Form  10-QSB and the other  filings  with the  Securities  and  Exchange
Commission made by the Company from time to time.  These and other factors could
cause  actual  results  to be  materially  different  from any  future  results,
performance  or  achievements  expressed  or  implied.  The  discussion  of  the
Company's plan of operation, including forward-looking statements, does not take
into  account  the effect of any  changes  to the  Company's  operations  or any
external  factors.  Accordingly,  readers  should not place  undue  reliance  on
forward-looking  statements.  Also,  the Company has no  obligation  to publicly
update forward-looking statements it makes in this Form 10-QSB.

     Overview

     The Company is currently in the development stage and has not yet generated
any  operating  revenues.  Since its  inception  in June 1998,  the  Company has
developed a single piece molded  pallet,  E Pallet(TM),  manufactured  primarily
from  recycled  plastics and  granulated  rubber  derived from  discarded  tires
(commonly referred to as "crumb rubber").  The Company is currently in the final
stages   of   testing   this   product,   and   expects   to  begin   generating
licensing-related fees during the fourth quarter of 2000. Further, the Company's
management   expects  that  the  Company  and/or  its  licensees  will  commence
commercial production of the E Pallet(TM) early in 2001.

     The Company had originally  planned to have its licensees  begin  producing
the E Pallet(TM) in June 2000 but decided to conduct additional tests, which has
delayed  the  previously  planned  start  date  by  approximately  four  months.
Significantly  improved substrate technology caused the Company to rethink their
initial production start-up dates. Consequently,  additional product testing was
required that would be specific to the improved substrate composition,  prior to
initiating  the launch of  production  operations  for  licensees.  Although the
Company's  decision to further  test the E  Pallet(TM)  has set back  production
dates,  the Company  believes  that this  additional  testing has  substantially
minimized or eliminated any concerns as to the E Pallet's(TM) design and ability
to perform.  The Company's  testing  program has included  in-depth  analysis of
substrate  compounds,  extrusion  methods and equipment  modifications.  Initial
prototypes  of the E Pallet(TM)  have been  developed  and refined.  The Company
expects to have  potential  customers  evaluate the E Pallet(TM)  through in-use
testing  beginning in the third quarter of 2000. The Company believes that after
a final  engineering  analysis  report is  completed,  the  Company  and/or  its
licensees  will  commence  commercial   production  of  the  E  Pallet(TM)  once
appropriate  production facilities are procured and commissioned for production,
currently anticipated for early 2001.


                                       16
<PAGE>

     Liquidity and Capital Resources

     The Company is not yet generating  revenues.  For the six months ended June
30,  2000,  the  Company  had a net loss of  $249,260.  The  Company's  net loss
accumulated  for the period from June 15, 1998  (inception) to June 30, 2000 was
$1,176,860. The Company anticipates that it will begin to generate revenue early
in 2001, upon the planned start of production of the E Pallet(TM) by the Company
and/or  its  licensees.  At June 30,  2000 the  Company  had  current  assets of
$86,432,  consisting of $64,687 in cash and $21,745 in prepaid expenses.  During
the six months ended June 30,  2000,  the  Company's  cash  resources  increased
slightly,  reflecting  increased  research  and  development  costs and  prepaid
licensing fees,  offset by cash raised by issuance of the Company's common stock
for aggregate proceeds to the Company of $257,500.  At June 30, 2000 the Company
had current  liabilities of $71,856.  At June 30, 2000 current  assets  exceeded
current  liabilities by $14,576.  Other than as discussed  above, the Company is
not aware of any trends, demands, commitments or uncertainties, other than those
affecting  business  and the  economy  in  general,  that  could  result  in the
Company's  liquidity  decreasing or increasing in a material way within the next
12 months.

     To date,  the Company has raised  capital  through  private  placements  of
common  stock  and  convertible   preferred  stock.  The  Company  has  budgeted
expenditures  for the twelve months through June 2001 of $504,282,  and plans to
raise  $550,000 in the next several  months to cover its proposed  expenditures.
These  funds may be raised  through  additional  equity  financings,  as well as
borrowings and other  resources.  The Company is currently  holding  discussions
with  potential  investors.  With the  capital  it has  raised to date,  and the
additional  $550,000 it plans to raise in the next several  months,  the Company
now  believes  that it is at the  point  where  it can  move  forward  with  its
production and marketing plans,  which in the short term include the start-up of
E Pallet(TM)  manufacturing  operations by Company licensees,  and in the longer
term include  adding  additional  licensees  and expanding the product line mix.
Management of the Company believes that its financing plans described above will
enable it to meet its obligations  including cash  requirements for at least the
next twelve months to June 30, 2001.

     To achieve and  maintain  competitiveness  of its  products  and to conduct
further  testing and  development  that will allow the Company to enter into the
production stage of operations, the Company may be required to raise substantial
funds in addition to funds already  raised through the issuance of the Company's
shares.  There can be no  assurance  that  additional  funding will be available
under  favorable  terms,  if at all. If adequate  funds are not  available,  the
Company may be required to curtail operations  significantly.  For example,  the
Company's longer-term plans include setting up its own production operations, in
addition to its shorter-term focus of having licensees produce the E Pallet(TM).
If the Company  cannot raise enough  funds,  it may not be able to carry out its
plan to set up its own  operations.  The Company might also have to obtain funds
through entering into arrangements with collaborative  partners or others.  That
could require the Company to relinquish rights to certain products,  which could
impair future sources of revenues for the Company.


                                       17
<PAGE>

     Product Testing and Development

     The Company has been actively involved in extensive testing and development
of the E Pallet(TM).  The Company  contracted with substrate  component  testing
engineers in the Akron,  Ohio area who performed the primary series of component
testing.  Subsequent  testing has been conducted on the E Pallet(TM) at Virginia
Polytechnic  Institute  and State  University  through  the William H. Sardo Jr.
Pallet and Container Research  Laboratories.  Additional E Pallet(TM) testing is
scheduled  during  August  2000 at  Virginia  Polytechnic  Institute  and  State
University testing facility.  The Company's  development focus is to ensure that
the E Pallet(TM) meets or exceeds current performance standards for hardwood and
plastic  pallets,  and that the E Pallet(TM) will be superior in performance and
will be cost  effective  to  produce  and sell.  In  particular,  the  Company's
development focuses on the safety, structural integrity,  reliability,  and cost
effectiveness  of the E  Pallet(TM),  involving  in-depth  analysis  of compound
variables and  strengths,  extrusion  methods and equipment  modifications.  The
Company believes that after extensive  studies and refinement,  it has minimized
or  eliminated  any  concerns  as to the E  Pallet's(TM)  design and  ability to
perform.  The Company  plans to conduct  further  testing which it believes will
provide  information  as to the longevity of the E Pallet(TM)  compared to other
materials and provide  marketing  strategies  for the Company.  Analysis to date
indicates  that the  Company's  standard  48-inch by 40-inch E  Pallet(TM)  will
surpass  current  hardwood and plastic pallet  performance  and will be a strong
competitor in the pallet industry worldwide.

     On November 16, 1999, the Company and Thermoplastic Composite Designs, Inc.
("TCD"),  entered into a  product/technology  development contract in connection
with  TCD's  assisting  the  Company  in  modifying  earlier  versions  of the E
Pallet(TM)   design.   TCD  is  a  composite  systems   engineering  and  design
corporation.  The  contract  required  TCD to  deliver a pallet  that would meet
design specifications including:  48-inch by 40-inch dimension; a maximum weight
requirement; and a target substrate composition. The contract also provided that
TCD would supply the appropriate  engineered E Pallet(TM) mold to be used at the
Company's first production facility. This first generation mold was available to
produce  finished  product in April  2000.  The  Company's  payments  under this
contract totaled $50,800 in 1999, and $83,000 in 2000,  completing the Company's
payment  obligations  under the  contract.  Finished  E  Pallet(TM)  product  is
scheduled for distribution to potential  customers for in-use  evaluation during
the third quarter of 2000.


                                       18
<PAGE>


     Anticipated Revenue Sources; Marketing and Distribution

     The Company  plans to generate  revenues  from  national and  international
licensing  agreements and royalty  agreements  based on units of production.  As
opportunities present themselves,  the Company will also consider developing and
operating  its own  manufacturing  facilities.  In  December  1999,  the Company
announced  that it had  received a letter of intent from  Cultech  International
Corporation to manufacture and market the E Pallet(TM) in Asia.  Cultech intends
to obtain exclusive  manufacturing  and marketing rights to the E Pallet(TM) for
all of Asia.  The terms of the letter of intent  provide  that the Company  will
deliver to Cultech a  manufacturing  system that will enable  Cultech to produce
one million E  Pallets(TM)  per year.  The parties have also agreed in principle
that, once engineering  studies are satisfactorily  completed,  the parties will
enter into an  agreement  whereby  Cultech  will make  payments  to the  Company
including  licensing  fees and royalty  payments  based on units of E Pallet(TM)
production.

     In March 2000, the Company  announced that it had received a production and
marketing  letter of intent  from  Bryan  Container  Company,  located in Bryan,
Texas.  Bryan,  which  manufactures  large  container lids among other container
products,  plans to modify its  production  site to  accommodate  the  necessary
changes  to  incorporate  the  E  Pallet(TM)  manufacturing  system,  using  the
Company's custom E Pallet(TM)  molds.  Also in March 2000, the Company announced
that  it  had  received  a  production  and  marketing  letter  of  intent  from
International  Pallets of California,  providing for the parties to enter into a
formal agreement to allow International Pallets to produce,  market and sell the
E Pallet(TM) in California  and Nevada.  However,  in June 2000, the Company and
International Pallets decided not to pursue these contemplated  arrangements and
are not negotiating any formal  agreement.  The Company currently plans to build
and operate a wholly owned  operation for California  and Nevada.  The Company's
management  anticipates  that initial  production of the E Pallet(TM)  composite
pallet  should  commence  in early 2001 from the  Company's  planned  production
facility.

     Recent Developments

     In July 2000,  the Company  announced that it had signed a letter of intent
with  Electroship (NY) Inc.  ("Electroship"),  whereby the Company would acquire
all of the outstanding  stock of Electroship in exchange for common stock of the
Company,  with other terms and  conditions  to be agreed  upon.  It is currently
anticipated that the Company would issue approximately 2.5 million shares of its
common stock in exchange for the Electroship shares. Electroship,  based in Long
Island,  New  York,  develops  wireless  tracking  technology  for the  shipping
industry.


                                       19
<PAGE>


     Employees

     The Company  currently  has four  full-time  employees.  Management  of the
Company  anticipates using consultants for business,  accounting and engineering
services on an as-needed basis.  Management does not currently anticipate making
any significant changes to the Company's employee headcount.


                                       20
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

     The  Company is a  defendant  in an action  filed by Mr.  Real Morel in the
Supreme Court of British Columbia,  Canada under which the Company was served in
May 2000.  Mr. Morel alleges  non-payment by the Company of amounts due pursuant
to demand  promissory  notes made by the Company to Mr. Morel  during 1998.  The
amount claimed is approximately  $69,600 including interest.  After consultation
with  British  Columbia  legal  counsel  and  a  review  of  the   circumstances
surrounding  the  issuance of the notes,  the  Company  has  resolved to dispute
liability and to advance a set-off and  counterclaim.  Management of the Company
believes  that the  outcome  will  not have a  material  adverse  effect  on the
financial position of the Company.


Item 2.  Changes in Securities

     None.


Item 3.  Defaults Upon Senior Securities

     None.


Item 4.  Submission of Matters to Vote of Security Holders

     The  following  matters  were  submitted to a vote of  shareholders  at the
Company's  annual meeting of  shareholders,  held on May 13, 2000, with the vote
tabulations* as indicated below:

     Voters  elected  three  incumbent  directors for one-year  terms.  The vote
tabulation for individual directors was:

               Directors                Shares For      Shares Withheld
               ---------                ----------      ---------------

           Jeannie M. Runnalls          11,028,300             --

           Henry David Still, IV        11,028,300             --

           James D. Scammell            11,028,300             --


     Voters  approved the adoption of the Company's 1999 Stock Plan by a vote of


                                       21
<PAGE>

11,028,300 for and 0 against. There were no abstentions or broker non-votes.

     Voters  approved the selection of Williams & Webster,  P.S., as auditors of
the Company for the Company's fiscal year ending December 31, 2000, by a vote of
11,028,300 for and 0 against. There were no abstentions or broker non-votes.


     * Numbers  represent  the  aggregate  voting  power of all votes  cast with
     holders  of the  Company's  common  stock  casting  one vote per  share and
     holders of the  Company's  Series A  Convertible  Preferred  Stock  casting
     twenty votes per share.


Item 5.  Other Information

     In July 2000,  the Company  announced that it had signed a letter of intent
with  Electroship  (NY) Inc.,  whereby  the  Company  would  acquire  all of the
outstanding  stock of  Electroship  in exchange for common stock of the Company.
See Part I -- Item 2. Plan of Operation -- Recent  Developments  for  additional
information about this announcement.


Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

     3.1  Company's  Articles  of  Incorporation,  as amended  October  12, 1999
          (incorporated  herein by  reference  to Exhibit  3.1 to the  Company's
          Annual  Report on Form 10-KSB for the year ended  December  31,  1999,
          filed with the Commission on April 7, 2000).

     3.2  Company's By-laws as amended and restated May 31, 2000.

     10.1 General  Assignment of Assets of the Rubber Mold Technology,  dated as
          of December  15,  1998,  between  Real  Morel,  as  Assignor,  and the
          Company, as Assignee (incorporated herein by reference to Exhibit 4 to
          the  Company's  Registration  Statement  on Form 10-SB  filed with the
          Commission on May 14, 1999,  Registration  No.  000-26095  ("Company's
          Form 10-SB")).

     10.2 Promissory Notes Executed by the Company in Favor of Real Morel, dated
          as of December 15, 1998, December 15, 1998, August 18, 1998, September
          24, 1998 and  November 16, 1998  (incorporated  herein by reference to
          Exhibit 5 to Company's Form 10-SB).

     10.3 Management Services  Agreement,  dated as of November 1, 1998, between


                                       22
<PAGE>

          Susan Westfall, as Contractor, and the Company (incorporated herein by
          reference to Exhibit 6 to Company's Form 10-SB).

     10.4 Management Services  Agreement,  dated as of November 1, 1998, between
          Madelyn Thomas, as Contractor, and the Company (incorporated herein by
          reference to Exhibit 7 to Company's Form 10-SB).

     27   Financial Data Schedule

     (b)  Reports on Form 8-K

     The Company filed no reports on Form 8-K during the three months ended June
30, 2000.


                                       23
<PAGE>

                                    SIGNATURE

     In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, Nevada, on August 10, 2000.


                                 ENVIROKARE TECH, INC.
                                 Registrant

                                 By:    /s/   JEANNIE M. RUNNALLS
                                      ------------------------------------------
                                      Name:   Jeannie M. Runnalls
                                      Title:  President and Director
                                              (Principal Executive Officer and
                                              Principal Financial and Accounting
                                              Officer)


                                       24
<PAGE>


Exhibit
Number            Description of Document
-------           -----------------------

3.1               Company's  Articles of  Incorporation,  as amended October 12,
                  1999  (incorporated  herein by reference to Exhibit 3.1 to the
                  Company's  Annual  Report on Form  10-KSB  for the year  ended
                  December  31,  1999,  filed  with the  Commission  on April 7,
                  2000).

3.2               Company's By-laws as amended and restated May 31, 2000.

10.1              General  Assignment  of Assets of the Rubber Mold  Technology,
                  dated  as  of  December  15,  1998,  between  Real  Morel,  as
                  Assignor, and the Company, as Assignee (incorporated herein by
                  reference to Exhibit 4 to the Company's Registration Statement
                  on Form  10-SB  filed  with the  Commission  on May 14,  1999,
                  Registration No. 000-26095 ("Company's Form 10-SB")).

10.2              Promissory  Notes  Executed  by the  Company  in Favor of Real
                  Morel,  dated as of December  15,  1998,  December  15,  1998,
                  August 18,  1998,  September  24, 1998 and  November  16, 1998
                  (incorporated  herein by  reference  to Exhibit 5 to Company's
                  Form 10-SB).

10.3              Management Services  Agreement,  dated as of November 1, 1998,
                  between  Susan  Westfall,  as  Contractor,   and  the  Company
                  (incorporated  herein by  reference  to Exhibit 6 to Company's
                  Form 10-SB).

10.4              Management Services  Agreement,  dated as of November 1, 1998,
                  between  Madelyn  Thomas,  as  Contractor,   and  the  Company
                  (incorporated  herein by  reference  to Exhibit 7 to Company's
                  Form 10-SB).

27                Financial Data Schedule



                                       25